Our Lisa Guscott, Head of Employment Law and HR Services, has provided a helpful Q & A on the flexible furlough scheme rules and the changes ahead.
From 1 July 2020, employers were be able to bring furloughed workers back to work on a part time basis, if appropriate, whilst still being able to claim under the CJRS for hours they have not worked.
No, it is only available in respect of those workers whom the employer has successfully claimed for under the CJRS previously i.e. workers who have been furloughed or at least three consecutive weeks between 1 March and 30 June 2020.
They can work as much or as little as required, with no minimum time to be on furlough, however claims under the CJRS must be for a minimum of seven calendar days. You can also do this on more than one occasion.
If employees are unable to return to work or employers do not have work for them to do, they can remain on furlough and you can continue to claim the grant (on a reduced staged basis) for their full hours under the existing rules.
Employers need to agree with employees (either directly or via a collective agreement with a trade union) what hours and shift patterns they will return to work on and the arrangement will need to be set out in a new written agreement between both parties. Employers will need to keep a copy of this written agreement, together with all other records relating to the furlough claim and how it has been calculated, for six years.
Employers will need to work out the employee’s usual working hours, record the hours they work and the remaining furloughed hours for each claim period. The guidance on the link below sets out different calculation methods depending on whether the individual has fixed or variable hours.
In short, no. Where a previously or currently furloughed employee starts a new furlough period before 1 July, this period must last for a minimum of 3 weeks (as per the current rules) even if this means it will end after 1 July. For employers that have a rotational furlough system in place, if one group is furloughed on 21 June, that group would have to stay fully furloughed until 11 July before they can then be put onto a flexible furlough arrangement.
The level of government grant provided through the CJRS will be slowly tapered, with employers being required to contribute towards furlough pay.
Any individuals who are furloughed continue to receive 80% of their wages up to £2,500 during the time they are on furlough. However, from 1 August, whilst the government will continue to contribute 80% of wages up to a cap of £2,500 per month, employers must pay the employer NICs and pensions contributions on the furlough pay.
The government’s contribution will reduce to 70% of wages up to a cap of £2,187.50 per month. Employers will, for the first time, have to pay the additional 10% along with the employer NICs and pension contributions.
The government’s contribution will reduce to 60% of wages up to a cap of £1,875 with employers paying the additional 20% along with the employer NICs and pension contributions.
The scheme is currently set to close entirely, on 31 October 2020 with no suggestion that it will be further extended.
Employers have until 31 July to make any claims in respect of the period on or before 30 June. Therefore, claims for furlough pay up to 30 June must be made separately to claims for furlough pay from 1 July.
Employers will only be able to make claims under the CJRS for days in July after 1 July 2020. Claims starting on or after 1 July must start and end within the same calendar month.
Employers can still only make one claim for any period, so it needs to include all furloughed workers in the claim even if they are paid at different times. The number of workers an employer can claim for in any single claim from 1 July cannot exceed the maximum number of workers the employer has claimed for up to 30 June. This means that employers who are operating rotating furloughs will not be able to put all previously furloughed employees on flexible furlough at the same time.
When claiming the grant, employers will need to report and claim for a minimum period of 1 week for grants to be calculated accurately across working patterns (although employers can choose to make claims for longer periods such as on monthly or two weekly cycles if preferred).
Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and the actual hours worked.
If an employer makes an error in a claim resulting in overpayment, they must pay this back to HMRC. Employers can tell HMRC about any overclaimed amount as part of their next claim and should keep a record of the adjustment for six years. HMRC are looking at a process for paying back overpayments where no future claim is to be made. If there was an underpayment, the employer has to contact HMRC to amend the claim and they will carry out further checks.